After becoming CEO of Citigroup (C 0.24%) in 2021, Jane Fraser began implementing a turnaround of the well-known bank and financial services institution. While it has taken several years to bear fruit, Citi's revamp, which entailed heavy layoffs and other costly restructuring efforts, finally started leading to improved financial results.
In turn, shares in the money center bank, previously a long-term underperformer, experienced an outsized surge in price. Citigroup stock is up over 47.4% year to date.
Following this banner year in terms of stock price performance, the question now is whether another surge is in the cards for 2026. The answer is: It's very much possible, especially as the bank enters a new phase of its transformation. Here's why.
Image source: Getty Images.
Far from resting on its laurels, Citi continues to restructure its business
Citigroup last reported earnings back in October. As seen in those results, for the quarter ending Sept. 30, 2025, the big bank is getting back on track in terms of revenue and earnings growth:
| Metric | Q3 2025 | Q3 2024 | Change (YOY) |
|---|---|---|---|
| Revenue | $22.1 billion | $20.2 billion | 9% |
| Earnings | $3.75 billion | $3.24 billion | 16% |
| Earnings per share (EPS) | $1.86 | $1.51 | 23.2% |
Source: Company filing.
Earnings per share growth in particular saw a big jump thanks to the combination of improved results, plus the impact of Citigroup's aggressive share repurchase efforts. Alongside improved revenue and earnings, Citi reported improvement among key banking metrics like return on average tangible common equity (ROTCE), which increased to 8%, from 7% during the prior year's quarter.
However, Citigroup isn't resting on its laurels; it continues to pursue restructuring efforts to further enhance financial growth and improvement. On Nov. 21, the bank announced its latest wave of sweeping changes.
These include the transition of Gonzalo Luchetti, formerly head of personal banking, into the CFO role currently held by Mark Mason. Alongside this and other executive leadership changes, Citigroup is also integrating its retail banking business into its wealth management business. The bank is also placing a greater priority on its U.S.-branded credit card business, making the unit one of its five core businesses.
These latest changes could prove key to driving further earnings growth
After beating expectations with its latest financial results, Citigroup now faces a high bar to wow investors once again. Sell-side analyst estimates for 2026 call for another year of above-average earnings growth.
The average of analyst estimates for 2026 earnings currently comes in at around $9.99 per share. That's over 31% above average earnings forecasts for 2025. Yes, with restructuring costs now in the rearview mirror, the cost savings from this reorganization are now flowing more to the bottom line. However, what may make the difference between meeting or beating expectations or falling short of them may have to do with the bank's organic growth.
Having said this, the aforementioned organizational changes could help make that difference. For instance, by having retail banking and wealth management under one division, Citi may have an easier go of cross-selling services, particularly to affluent retail banking clients.
Citi is already one of the largest credit card issuers in the U.S., with around 12% market share. However, with top competitor JPMorgan Chase holding 18% market share, there may be room for Citi to gain further ground.
NYSE: C
Key Data Points
Is Citigroup stock a buy ahead of the new year?
In recent weeks, Citigroup shares have held steady at around $100 per share. It may not be until the bank next reports earnings, in mid-January, that the stock makes its next big move. With this in mind, is now a good time to enter or add to a position?
Currently, Citigroup trades at a forward P/E ratio of around 10. This represents a moderate discount to competitors like Wells Fargo and JPMorgan Chase, both of which trade at forward multiples in the low to mid-teens.
Even if investors keep valuing this bank stock at a discount, shares could still rally in line with earnings growth. If this happens, shares could deliver another year of outsized returns. Don't forget that this stock has a forward dividend yield of 2.3%. This could provide a slight boost to overall returns.
In short, if you think you missed out on the Citigroup comeback, don't worry. Much suggests there's still an opportunity to capitalize on this big bank's big transformation.
